U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-QSB


           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                      For the quarter ended March 31, 2004
                                       OR
          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                        Commission file number 000-49636


                              VIKING SYSTEMS, INC.
           (Name of Small Business Issuer as specified in its charter)

                 Nevada                                   86-0913802
      -------------------------------                 -------------------
      (State or other jurisdiction of                 (I.R.S.employer
      incorporation or organization)                  identification No.)

                 7514 Girard Ave, Suite 1509, La Jolla, CA 92037
                    (Address of principal executive offices)

         Registrant's telephone no., including area code: (858) 456-6608

                                       N/A
              Former name, former address, and former fiscal year,
                         if changed since last report.

    Securities registered pursuant to Section 12(b) of the Exchange Act: None

 Securities registered pursuant to Section 12(g) of the Exchange Act: $.001 Par
                               Value Common Stock

Check  whether  the Issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the Exchange  Act during the  preceding 12 months (or for
such shorter period that the registrant was required to file such reports),  and
(2) has been subject to such filing requirements for the past 90 days. (1) Yes X
No (2) Yes X No____.

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in rule 12b-2 of the Exchange Act). Yes___ No X

Common Stock  outstanding at May 10, 2004 - 6,249,650  shares of $.001 par value
Common Stock.

                     DOCUMENTS INCORPORATED BY REFERENCE: NONE




<PAGE>


                                   FORM 10-QSB

                       FINANCIAL STATEMENTS AND SCHEDULES
                              VIKING SYSTEMS, INC.

                      For the Quarter ended March 31, 2004

      The following  financial  statements and schedules of the registrant are
      submitted herewith:

                        PART I - FINANCIAL INFORMATION
                                                                       Page of
                                                                     Form 10-QSB
                                                                     -----------
Item 1. Financial Statements:

            Unaudited Balance Sheet at March 31, 2004                          3
            Unaudited Statement of Operations for the Three Months
                  Ended March 31, 2004 and 2003                                4
            Unaudited Statement of Cash Flows for the Three Months
                  Ended March 31, 2004 and 2003                            5 - 6
            Notes to Financial Statements                                 7 - 10

Item 2. Management's Discussion and Analysis of Financial Condition
        and Results of Operations                                             11

Item 3. Controls and Procedures, Evaluation of Disclosure Controls
        and Procedures                                                        19


                          PART II - OTHER INFORMATION

                                                                            Page
                                                                            ----

Item 1. Legal Proceedings                                                     20
Item 2. Changes in the Rights of the Company's Security Holders               20
Item 3. Defaults by the Company on its Senior Securities                      20
Item 4. Submission of Matters to Vote of Security Holders                     20
Item 5. Other Information                                                     20
Item 6(a).  Exhibits                                                          20
Item 6(b).  Reports on Form 8-K                                               21


                                       2

<PAGE>

                                                            VIKING SYSTEMS, INC.
                                                         Unaudited Balance Sheet
                                                                  March 31, 2004
--------------------------------------------------------------------------------

         Assets

Current assets:
  Cash                                                          $       361,975

Property and equipment, net                                               6,263
                                                                ---------------

                                                                $       368,238
                                                                ---------------

-------------------------------------------------------------------------------

         Liabilities and Stockholders' Equity

Current liabilities:
  Accounts Payables                                             $        65,607
                                                                ---------------


Commitment and contingencies                                                  -

Stockholders' equity:
  Preferred stock, $.001 par value, 5,000,000 shares
    authorized, 5,000,000 shares issued and outstanding                   5,000
  Common stock, $.001 par value, 20,000,000 shares
    authorized;  6,294,650 shares issued and outstanding                  6,295
  Additional paid-in capital                                            733,705
  Accumulated deficit                                                  (442,369)
                                                                ---------------


          Total stockholders' equity                                    302,631
                                                                ---------------

                                                                $       368,238
                                                                ---------------

--------------------------------------------------------------------------------
See accompanying notes to financial statemenst.

                                       3


<PAGE>

                                                            VIKING SYSTEMS, INC.
                                                         Unaudited Balance Sheet
--------------------------------------------------------------------------------

                                                             Three Months
                                                            Ended March 31,
                                                        ------------------------
                                                           2004        2003
                                                        ------------------------

Revenues                                                $        -  $         -

Expenses:
   General and administrative expenses                     111,107            -
   Depreciation and amortization expenses                      569            -
                                                        ------------------------

Loss from continuing operations before provision for
  income taxes                                            (111,676)           -

Income taxes                                                     -            -
                                                        ------------------------

Net loss from continuing operations                       (111,676)           -

Loss from discontinued operations, net of income taxes           -       (3,718)
                                                        ------------------------

Net loss                                                $ (111,676) $    (3,718)
                                                        ========================

Net loss per share from continuing operations           $    (0.02) $         -

Net loss per share from discontinued operations         $        -  $         -
                                                        ========================

Net loss per share - basic and diluted                  $    (0.02) $         -
                                                        ========================

Weighted average shares - basic and diluted             $6,295,000  $ 2,691,000
                                                        ========================



--------------------------------------------------------------------------------
See accompanying notes to financial statemenst.

                                       4


<PAGE>

                                                            VIKING SYSTEMS, INC.
                                                         Unaudited Balance Sheet
                                                    Three Months Ended March 31,
--------------------------------------------------------------------------------

                                                        2004           2003
                                                     (unaudited)    (unaudited)
                                                     ---------------------------

Cash flows from operating activities:
  Net loss                                           $   (111,676)  $    (3,718)
  Adjustments to reconcile net loss to net cash
    used in operating activities:
     Depreciation and amortization                            569             0
     Decrease (increase) in:
      Assets from discontinued operations                       0           867
     Increase (decrease) in:
      Liabilities from discontinued operations            (21,218)            -
      Accounts payable                                     65,607         2,103
                                                     ---------------------------

          Net cash used in operating activities           (66,718)         (748)
                                                     ---------------------------
Cash flows from investing activities:
        Purchase of property and equipment                 (6,832)            -
                                                     ---------------------------
Cash flows from financing activities:
  Proceeds on related party notes payable                       0           470
  Proceeds from issuance of Preferred Stock               400,000             0
                                                     ---------------------------
          Net cash provided by financing activities       400,000           470
                                                     ---------------------------
Net change in cash and cash equivalents                   326,450          (278)

Cash and cash equivalents at beginning of period           35,525           358

Cash and cash equivalents at end of period           $    361,975   $        80
                                                     ===========================


--------------------------------------------------------------------------------
See accompanying notes to financial statements.

                                         5

<PAGE>

                                                            VIKING SYSTEMS, INC.
                                                         Statement of Cash Flows
                                                                       Continued
--------------------------------------------------------------------------------

Supplemental cash flow information:

      No amounts were paid for interest or income taxes during the three months
      ended March 31, 2004 and 2003.

                                       6

<PAGE>

                                                            VIKING SYSTEMS, INC.
                                                   Notes to Financial Statements

                                                         March 31, 2004 and 2003
--------------------------------------------------------------------------------

1. Organization     Organization and Business
   and Summary      Viking  Systems,  Inc.,  (the  Company) was organized as a
   of Significant   corporation  in the state of Nevada on May 28,  1998,  for
   Accounting       the purpose of providing  training and  curriculum for the
   Policies         information  technology industry.  During 2001 the Company
                    changed its business focus to the  development of software
                    applications,  hardware  sales and  leasing,  and training
                    and  support.   As  of  December  31,  2002,  the  Company
                    discontinued  its  current  operations.  The  Company  has
                    entered into an agreement to purchase,  subject to various
                    conditions  and  approvals,  the  assets of Vista  Medical
                    Technologies,    Inc.'s   (Vista)    medical    technology
                    business.  Vista, a Delaware  Corporation,  is involved in
                    the development,  manufacture, and sale of medical devices
                    and related  technology.  After the proposed  acquisition,
                    the Company  will  continue to develop,  manufacture,  and
                    sell  the  products   associated   with  Vista's   medical
                    technology business.

                    Unaudited Financial Statements
                    The unaudited  financial  statements  include the accounts
                    of the Company and include all adjustments  (consisting of
                    normal  recurring  items),  which are,  in the  opinion of
                    management,  necessary  to present  fairly  the  financial
                    position   as  of  March  31,  2004  and  the  results  of
                    operations  for the quarters ended March 31, 2004 and 2003
                    and cash flows for the  quarters  ended March 31, 2004 and
                    2003.  The results of  operations  for the  quarter  ended
                    March  31,  2004  are not  necessarily  indicative  of the
                    results to be expected for the entire year.

                    Basis of Presentation
                    The accompanying  unaudited financial statements have been
                    prepared   by   management   in   accordance    with   the
                    instructions  in  Form  10-QSB  and,  therefore,   do  not
                    include  all   information   and  footnotes   required  by
                    accounting  principles  generally  accepted  in the United
                    States  of  America  and  should,  therefore,  be  read in
                    conjunction  with the  Company's  Form 10-KSB,  filed with
                    the Securities and Exchange  Commission.  These statements
                    do include  all normal  recurring  adjustments,  which the
                    Company believes  necessary for a fair presentation of the
                    statements.   The  interim   operations  results  are  not
                    necessarily indicative of the results for the entire year.

                                       7

<PAGE>

                                                            VIKING SYSTEMS, INC.
                                                   Notes to Financial Statements
--------------------------------------------------------------------------------

1. Organization     Earnings Per Common and Common Equivalent Share
   and Summary      The  computation  of basic  earnings  per common  share is
   of Significant   computed  using  the  weighted  average  number  of common
   Accounting       shares outstanding during the year.
   Policies
   Continued        The  computation  of diluted  earnings per common share is
                    based on  weighted  average  number of shares  outstanding
                    during the year plus common stock  equivalents which would
                    arise from the exercise of stock options  and/or  warrants
                    outstanding  using  the  treasury  stock  method  and  the
                    average  market  price per share  during the year.  Common
                    stock   equivalents   are  not  included  in  the  diluted
                    earnings  per  share  calculation  when  their  effect  is
                    antidilutive.

                    Series A Preferred Stock
                    During the three months ended March 31, 2004,  the Company
                    sold  5,000,000  shares  of Series A  Preferred  Stock for
                    $400,000.  The Series A Preferred  Stock has a liquidation
                    preference  of $.08 per share,  or  $400,000  at March 31,
                    2004.   Each  share  of  Series  A   Preferred   Stock  is
                    convertible into four shares of common stock.

                    Stock-Based Compensation
                    The Company  accounts for its plans under the  recognition
                    and   measurement   principles  of  APB  Opinion  No.  25,
                    Accounting  for Stock  Issued to  Employees,  and  related
                    interpretations.   No  stock-based  employee  or  director
                    compensation  cost is reflected in net loss,  as all these
                    options  granted  had an  exercise  price that  equaled or
                    exceeded the market value of the  underlying  common stock
                    on the date of grant.  No stock options  vested during the
                    three  months  ended March 31,  2004 and 2003.  Therefore,
                    had  compensation  cost for these  plans  been  determined
                    based  upon the fair  value at the grant  date  consistent
                    with the  methodology  prescribed  under SFAS No. 123, the
                    Company's net earnings would not have changed.

2. Going            The accompanying  financial  statements have been prepared
   Concern          under the  assumption  that the Company will continue as a
                    going   concern.   Such   assumption    contemplates   the
                    realization of assets and  satisfaction  of liabilities in
                    the  normal  course  of  business.  The  auditor's  report
                    dated March 1, 2004 for the year ended  December  31, 2003
                    included a going concern  qualification  which stated that
                    significant   operating  losses  raise  substantial  doubt
                    about  the  Company's  ability  to  continue  as  a  going
                    concern.

                                       8

<PAGE>

                                                            VIKING SYSTEMS, INC.
                                                   Notes to Financial Statements
--------------------------------------------------------------------------------

2. Going            During the three months ended March 31, 2004,  the Company
   Concern          received  $400,000  from the sale of  5,000,000  shares of
   Continued        preferred  stock. On April 15, 2004, the Company  acquired
                    the  medical   technology   business   of  Vista   Medical
                    Technologies,  Inc.  Management  believes that  additional
                    financing  will be needed to operate  and grow the medical
                    technology  business  as  well  as to  acquire  additional
                    businesses  or assets.  Potential  sources of cash include
                    loans  from  shareholders,  sale of the  Company's  stock,
                    profitable  operations,   external  debt,  or  alternative
                    methods   such  as  mergers  or  sale   transactions.   No
                    assurances  can be given,  however,  that the Company will
                    be able to obtain any of these potential sources of cash.

                    The financial  statements  do not include any  adjustments
                    that might be  necessary  should the  Company be unable to
                    continue as a going  concern.  The Company's  continuation
                    as a going  concern  is  dependent  upon  its  ability  to
                    generate  sufficient  cash flow to meet its obligations on
                    a timely basis, to obtain  additional  financing as may be
                    required, and ultimately to attain profitability.

3. Discontinued     On December 31, 2002,  the Company's  previous  management
   Operations       and  board  of  directors   decided  to  discontinue   its
                    operations  due to the Company's  insufficient  cash flows
                    to support operations.

                    Income statement  presentation of discontinued  operations
                    for the three months ended March 31:
                                                            2004        2003
                                                        ------------------------

                         Revenue                        $         -  $    4,561
                         Cost and expenses                        -      (8,279)
                                                        ------------------------
                         Net loss from discontinued
                          operations                    $         -  $   (3,718)


4. Subsequent       In April Events 2004,the Company acquired the assets of the
   Events           medical technology business of Vista Medical  Technologies,
                    Inc. for  $158,718, issuance of 3,054,000  shares of Viking
                    Common  Stock,  and the assumption  of certain  liabilities
                    relating to the Medical Technology  Business and the assets
                    purchased.

                                       9

<PAGE>

4. Subsequent       In  addition to the  purchase  of assets  from  Vista,  at
   Events           closing  Viking  entered into a "License  Agreement"  with
   Continued        Vista  whereby  Viking  now has the  exclusive,  worldwide
                    license to  commercialize  certain  intellectual  property
                    owned by Vista,  which is used in the  Medical  Technology
                    Business.  The License Agreement  requires Viking to pay a
                    royalty  of 5% of  gross  revenues  for  certain  products
                    sales and 10% of gross  revenues for other product  sales.
                    The  agreement   provides  for  minimum  annual  royalties
                    ranging   from   $150,000  to  $375,000   per  year.   The
                    royalties  are to be paid until the earlier of the date on
                    which Viking has paid Vista an aggregate of  $4,500,000 or
                    the  fifth   anniversary  of  effective  date.  The  total
                    minimum  royalty  payable  through  the fifth  anniversary
                    date  is  $1,425,000.  At the  end of the  royalty.  Vista
                    will assign and  transfer all of Vista's  rights,  titles,
                    and  interests  in  the   intellectual   property  for  no
                    additional considerations.

                                       10

<PAGE>

                                     ITEM 2
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In this report  references  to  "Viking,"  "we," "us," and "our" refer to Viking
Systems, Inc.

Introduction

     Viking  was  incorporated  in  Nevada  on May 28,  1998,  discontinued  its
previous operations,  and in 2003, changed its business plan and management. Our
business  plan is to complete a series of  acquisitions  in the  medical  device
market,  initially focusing on companies with vision,  optics, laser, sensor and
other  medical  technology.  On  December  22,  2003,  we entered  into an Asset
Purchase  Agreement  for our first  acquisition.  On April 15,  2004,  the Asset
Purchase  agreement  was  closed  and the  asset  purchase  agreed  to  therein,
consummated.

Viking Business Strategy

     Viking is  strategically  focused  on  developing  a  portfolio  of medical
products,  technologies  and  services  that  serve  the  needs of the  surgical
environment.  Through our development  capabilities,  targeted  acquisitions and
business  alliances,  we intend  to  position  Viking as a leader in  integrated
information (Infomatix(TM)), visualization and surgical control solutions.

     Early  Stage  Ventures.  We are  interested  in early  stage  ventures  and
research  programs (private or public) with technologies that are either focused
on  clinical/surgical  information  (Infomatix(TM))  or leading edge imaging and
optics appropriate to minimally invasive or complex surgical procedures. We seek
investment  opportunities  and  licensing  agreements  with  those that meet our
standards of commercial potential,  portfolio alignment and patents of strategic
value.

     Mergers and Acquisitions.  We are actively seeking  businesses,  operations
and   product-lines   that  are   focused   on   clinical/surgical   information
(Infomatix(TM)),  digital imaging, 3D visioning,  surgical robotics,  endoscopic
and laparoscopic  solutions and single-use  surgical products.  We believe there
are a substantial number of businesses in both North America and Europe that are
complementary  to  our  technologies,   portfolio   requirements  and  strategic
direction.  Given the continuing  downturn in provider capital spending,  a weak
IPO market and the need for  alternative  exit  strategies  for the many venture
capital  firms  holding a portfolio of small medical  technology  companies,  we
believe  we offer a  pathway  for  growth  and  success.  We  intend  to play an
increasing role in the medical  technology  market,  with the goal of generating
revenues, profitability and increased market value.

     Small and midsize  companies,  operations  or products that we acquire will
likely meet some or all of the following criteria:

        o     Demonstrated revenue growth
        o     Strategic patents and/or technology leadership
        o     Strong relationships in the surgical community

                                       11

<PAGE>

        o     Regulatory approval (FDA and/or CE)
        o     Solid technical management and skills
        o     Distribution and/or Service capability

     Business  Alliances  and  Partnerships.  We will seek out  businesses  that
require  expanded  distribution  and have products and services within the scope
and intent of our  business.  We are  particularly  interested  in alliances and
partnerships   with   organizations   having    clinical/surgical    information
(Infomatix(TM)) capabilities, a systems integration and engineering focus and/or
have  software  and  imaging  products  currently  recognized  and in-use in the
surgical environment.  We believe the Vista acquisition gives us a good platform
for strategic acquisitions and alliances in our markets.

Acquisition Agreement with Vista Medical Technologies, Inc.

     On December  22, 2003,  Viking  entered  into an Asset  Purchase  Agreement
("Purchase  Agreement")  with Vista  Medical  Technologies,  Inc.  ("Vista"),  a
Delaware  corporation.  Pursuant to the  Purchase  Agreement,  Viking  agreed to
purchase, subject to the terms and conditions of the Purchase Agreement, certain
assets used by Vista in its medical device and technology business (the "Medical
Technology  Business").  The  closing  of  the  Purchase  Agreement  ("Closing")
occurred on April 15, 2004. In addition to the purchase of assets from Vista, at
Closing Viking entered into a "License  Agreement" with Vista whereby Viking now
has the  exclusive,  worldwide  license to  commercialize  certain  intellectual
property owned by Vista which is used in the Medical Technology Business.

Description of Vision Systems Group

     As the  result  of the  acquisition  of  assets  and the  licensing  of the
technologies from Vista, we now operate the Medical  Technology  Business as the
Vision  Systems  Group (VSG) of Viking.  The Vision  Systems  Group,  located in
Westborough,  Massachusetts,  develops,  manufactures and markets products which
provide surgeons and  interventional  physicians  performing  complex  minimally
invasive procedures with a more effective,  ergonomic method of visualization of
anatomical  structures.  3-D  Visualization is generally  regarded as a critical
enabler to the broader  adoption of complex  minimally  invasive  procedures  in
numerous  clinical  specialties.  Viking  aims to increase  surgeons'  access to
critical  operative data. The surgeon's access to operative data, on demand,  in
real time and  integrated  with the  anatomical  image,  can  enhance  procedure
performance.  Until recently,  visualization products have failed to capture the
quality and realism  necessary to be  differentiated  from standard flat imaging
modalities.  With  products  introduced  in 2004,  VSG has  achieved the quality
breakthroughs  that the Company  believes will meet this much  recognized  need,
accelerate  adoption and further clinical advances in orthopedic,  laparascopic,
cardiac, neurosurgical, ENT and other rapidly evolving specialties.

     VSG's principal product line is the Endosite  Visualization and Information
System for general  surgery,  which combines a stereo head mounted  display with
3-D  video  cameras  to  provide  critical  visual  information  during  complex
minimally invasive  procedures,  combined with the real-time ability to view new

                                       12

<PAGE>

additional  information  in a  voice-controlled,  picture-in-picture  format  to
facilitate  decision-making.  The VSG Head Mounted Display (HMD),  incorporating
picture-in-picture capability and voice control, is designed to give the surgeon
ergonomic  real-time  access to such critical  information,  integrated with the
anatomical images generated by the endoscopic camera systems.

     The trend governing the development of surgical procedures in most surgical
disciplines is consistently towards a less invasive approach. In the last twenty
years,  the majority of non-complex  procedures  (cholecystectomy,  arthroscopy)
have converted to minimally  invasive  technique.  The  conversion  rate in more
complex,  usually reconstructive,  procedures has inevitably been slower, either
because  the  procedure  protocol  is not yet well  worked  out or  because  the
contributing  technologies are not sufficiently  developed to the required level
of sophistication (endoscopic cardiac surgery, in its first iteration, is a good
example.)  However,  the trend  towards  conversion  of complex  procedures to a
minimally  invasive  approach is reaching an  inflection  point,  as  applicable
technologies move from first to second generation,  and companies and physicians
learn how to combine their utilization to enable effective procedure protocols.

     More complex  procedures  usually  involve both resection and dissection of
small  and  delicate  neural  and  circulatory  structures,  as well as  precise
reconstructive  suturing.  It is in this  environment  that the benefits of true
three-dimensional  vision become apparent.  As other technologies,  particularly
robotics, also advance, the necessity of "natural" 3-D visualization is becoming
accepted  as a  standard.  The most  significant  rewards,  in terms of  patient
benefit,  will be received when the most invasive and complex procedures convert
to a  minimally  invasive  approach.  The Company  believes  that that a natural
ergonomic  3-D  visualization  capability  is an  essential  component  of  this
inevitable  progression.  These  trends are  evident in the data for the general
laparoscopy market which is projected to grow to over $1.2 billion by 2006.

Vision System Group Products

     Our technology provides a 3-D visualization solution to the inherent vision
restrictions  and demands of minimally  invasive  microsurgery.  Our  technology
provides  the surgeon  with a clear view of the anatomy with the ability to view
additional information in a voice-controlled,  picture-in-picture  format, which
facilitates  real-time  decision making during the procedure.  Our technology is
based on the  following  principles  which we believe are essential in advancing
the techniques of minimally invasive  microsurgery.  We believe these principles
offer several key advantages over other visualization approaches:

          3-D View.  The surgeon's  ability to view the  principal  image of the
     anatomy in 3-D  provides the accurate  depth  perception  necessary so that
     vital  anatomical  structures are accurately  identified and located.  This
     improves  safety,  precision and speed of the procedure.  Also, a secondary
     video image is available in  picture-in-picture  format, when the procedure
     will benefit from two different views of the anatomy.

                                       13

<PAGE>

          High Resolution  Images.  The  availability of a high resolution image
     which can be electronically  managed by the surgeon significantly  enhances
     the  surgeon's  ability  to  differentiate  critical  tissues in a confined
     setting and perform intricate dissection, reconstruction and removal.

          Access.  The surgeon  benefits  from  technology  which allows for the
     direct  insertion of a camera into the body cavities or organs and provides
     high quality images that are easy to see and understand.

          Ergonomics.  Due to the complex and time consuming nature of minimally
     invasive microsurgery procedures, the surgeon requires an ergonomic display
     system which allows  comfortable  operating posture and maximizes  hand-eye
     coordination without strain.

          Information  Integration.  The surgeon's access to critical monitoring
     and  diagnostic  data,  on  demand,  in real time and  integrated  with the
     anatomical  image within the  surgeon's  visual field,  enhances  procedure
     performance.

     These  principles form the basis of our EndoSite  Vision System  components
and our OEM camera systems.  All necessary 510(k)  clearances and CE marks which
are required to market the components of the EndoSite System have been received.

     The  Vision  Systems  Group is  operating  from  its  current  facility  in
Westborough MA with 22 employees.

General Terms of the Purchase and License Agreements

     The Purchase  Agreement  provided  that we acquire  from Vista,  the assets
relating to the Medical  Technology  Business for the following  considerations:
(i) cash in an amount of $158,718;  (ii) the issuance of 3,054,000 shares of our
common stock to Vista; and (iii) the assumption of certain liabilities  relating
to the Medical Technology Business and the assets purchased.

     In addition to the assets we purchased from Vista, we also licensed certain
"Intellectual  Property" from Vista. The Intellectual  Property we are licensing
includes any and all patents,  patent registrations,  patent applications,  data
rights, utility models, business processes, trademarks, trade secrets, know how,
trade names, registered or unregistered designs, mask works,  copyrights,  moral
rights  and  any  other  form  of  proprietary  protection  afforded  by  law to
intellectual  property,  or  any  applications  therefore,  which  arises  or is
enforceable under the laws of the United States,  any other  jurisdiction or any
bi-lateral or multi-lateral treaty regime which relate to the Medical Technology
Business.

     The License Agreement  requires us to pay a royalty of 5% of gross revenues
(as defined in the License Agreement) for certain product sales transactions and
10% of  gross  revenues  for  other  product  sales  transactions.  The  License
Agreement  grants us the worldwide,  exclusive  license to use the  Intellectual
Property to manufacture,  market, sublicense or otherwise commercialize products

                                       14

<PAGE>

using  the  technology  included  in  the  Intellectual  Property.  The  License
Agreement  provides  for  minimum  annual  royalties  ranging  from  $150,000 to
$375,000 per year.

     The royalties  agreed to in the License  Agreement are to be paid until the
earlier of the date on which we have paid  Vista an  aggregate  of Four  Million
Five Hundred Thousand Dollars ($4,500,000) or the fifth anniversary of effective
date of the License Agreement ("Total Royalty"). At the end of the fifth year or
if we pay Vista the Total  Royalty,  Vista is required to assign and transfer to
us all  of  Vista's  rights,  title  and  interests  in and to the  Intellectual
Property for no additional consideration. If we fail to pay the required minimum
royalties are otherwise  breach the License  Agreement,  Vista may terminate the
license.

Liquidity and Capital Resources

     As of March 31, 2004,  we had total assets of $368,238,  of which  $361,975
was cash and $6,263 was for property and equipment. As of March 31, 2004, we had
liabilities of $65,607. As of December 31, 2003, we had total assets of $ 35,525
and  liabilities  of $21,218.  The increase in assets from  December 31, 2003 to
March 31,  2004 was the result of our sale of  5,000,000  shares of our Series A
Preferred  Stock  for  $400,000.  Each  share  of  Series A  Preferred  Stock is
convertible into four shares of common stock.

     On April 15,  2004,  subsequent  to the end of the quarter  ended March 31,
2004, we completed our acquisition of the medical  technology  business of Vista
Medical  Technologies,  Inc.  Accordingly,  our financial  position is currently
significantly different than our financial position was as of March 31, 2004.

     In pursuing our current business plan we intend to attempt to acquire other
businesses  or business  operations.  We have not yet  selected  any  additional
acquisition targets, but are continuing our search for suitable acquisitions. We
anticipate that we will be required to raise  additional  capital to fund future
acquisitions.  We will likely attempt to raise some  additional  capital through
the sale of our securities in private and/or public offerings.

     The auditor's report on our December 31, 2003 financial statements included
a going concern qualification.

Results of Operations

     In 2002 we discontinued our previous operations. As described above, we are
now engaged in the medical device market.  Our first  acquisition  was completed
after the end of the quarter ended March 31, 2004.

     During the  quarter  ended  March 31,  2004,  we  continued  our efforts to
position  Viking  Systems  to move  forward  with our  business  plan as well as
devoted  management time and expense  related to the Vista Medical  Acquisition.
Accordingly,  our results of operations for the quarter ended March 31, 2004 are
not  directly  comparable  to the quarter  ended March 31,  2003.  Further,  our

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results of operations for the quarter ended March 31, 2004 are not indicative of
our future operating results.

     For the three months ended March 31, 2004 and 2003, we had no revenues. For
the three months ended March 31, 2004 we had general and administrative costs of
$111,107  consisting of salaries,  professional fees, travel and other expenses.
Inasmuch as we discontinued  our previous  operations in 2002, and accounted for
the  same as  discontinued  operations,  we had no  general  and  administrative
expenses for the three months ended March 31, 2003. We did have a loss of $3,718
from  discontinued  operations  in the three  months ended March 31, 2003 and no
loss from discontinued operations for the three months ended March 31, 2004.

     Net  loss.  Our net loss for the three  months  ended  March  31,  2004 was
$111,676  compared  to $3,718 for the three  months  ended March 31,  2003.  The
increased loss was attributed to general and administrative expenses incurred in
connection  with  the   implementation   of  our  new  business  plan,  and  for
professional fees.

Forward Outlook and Risks

     This  Form  10-QSB   contains  and   incorporates   by  reference   certain
"forward-looking statements" within the meaning of Section 27A of the Securities
Act  and  Section  21E of the  Exchange  Act  with  respect  to  results  of our
operations and businesses.  All statements,  other than statements of historical
facts,  included in this Form 10-QSB,  including those regarding  market trends,
our  financial  position,  business  strategy,  projected  costs,  and plans and
objectives of management for future operations, are forward-looking  statements.
In general,  such statements are identified by the use of forward- looking words
or phrases including,  but not limited to, "intended,"  "will," "should," "may,"
"expects," "expected,"  "anticipates," and "anticipated" or the negative thereof
or variations thereon or similar terminology.  These forward-looking  statements
are based on our current expectations. Although we believe that the expectations
reflected in such  forward-looking  statements are  reasonable,  there can be no
assurance   that  such   expectations   will  prove  to  be   correct.   Because
forward-looking  statements involve risks and uncertainties,  our actual results
could differ  materially.  Important  factors that could cause actual results to
differ materially from our expectations are disclosed hereunder and elsewhere in
this Form 10-QSB. These forward-looking  statements represent our judgment as of
the date of this Form 10-QSB.  All subsequent  written and oral  forward-looking
statements  attributable to Viking are expressly  qualified in their entirety by
the Cautionary  Statements.  We disclaim,  however,  any intent or obligation to
update our forward-looking statements.

     Operating History;  No Assets; No Present Source of Revenues.  We have been
inactive since 2002. We just recently  commenced active  operations by acquiring
assets from Vista and intend to acquire other  operations.  Potential  investors
should be aware that there is only a limited  basis upon which to  evaluate  our
prospects for achieving our intended business  objectives.  We have no resources
and have had limited  revenues  since our  formation.  In addition,  we will not
generate any revenues (other than investment income) until, at the earliest, the
consummation  of  the  acquisition  of the  assets  from  Vista  or  some  other
operation.

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     Possibility of Total Loss of Investment.  An investment in the Company,  is
an extremely  high risk  investment,  and should not be made unless the investor
has no need for current  income from the invested  funds and unless the investor
can afford a total loss of his or her investment.

     Additional  Financing  Requirements.  We will  likely be  required  to seek
additional  financing in order to fund our operations and carry out our business
plan.  There  can be no  assurance  that such  financing  will be  available  on
acceptable  terms, or at all. We do not have any  arrangements  with any bank or
financial  institution  to  secure  additional  financing  and  there  can be no
assurance that any such arrangement,  if required or otherwise sought,  would be
available  on  terms  deemed  to be  commercially  acceptable  and in  our  best
interests.

     No public market for  Securities.  There is no public market for our common
stock and we can give no assurance  that an active  market will  develop,  or if
developed,  that it will be sustained.  There can be no assurance that a trading
market for our securities will ever develop.

     Auditor's Opinion has a Going Concern  Qualification.  Our auditor's report
dated  March 1, 2004 for the year  ended  December  31,  2003  included  a going
concern  qualification which stated that our significant  operating losses raise
substantial doubt at that time about its ability to continue as a going concern.

     No Appraisal of Vista Assets. We did not obtain an independent appraisal or
valuation of the assets and operations we intend to acquire from Vista.

     We do  not  anticipate  paying  any  dividends  and  any  gains  from  your
investment  in our stock will have to come from  increases  in the price of such
stock. We currently intend to retain any future earnings for use in our business
and do not anticipate paying any cash dividends in the foreseeable future.

Medical Operations Risks

     We acquired  assets and operations  from Vista as described  above. We also
intend to attempt to acquire  additional  medical  products and operations  from
time to time as opportunities  become  available.  Our operations in the medical
product  industry  will subject us to various risks which  include,  but are not
limited, to the following:

     We Will Operate in a Competitive  Market.  The market for medical  products
and services is  competitive  and new  offerings and  technologies  are becoming
available  regularly.  We cannot  guarantee  that we will  compete  successfully
against our potential  competitors,  especially those with significantly greater
financial resources or brand name recognition.

     If We Fail to Retain Key  Personnel and Hire,  Train and Retain  Additional
Qualified and Experienced Employees,  We May Not Be Able to Compete Effectively.
We  hired  substantially  all of  the  employees  involved  in  Vista's  Medical
Technology  Business.  Our  future  success  will  depend  to a large  extent on

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retaining such employees and recruiting  sufficient  qualified employees to fill
vacancies  created by attrition or expansion of our operations.  There is likely
to be a competitive  labor market for such staff and there is no assurance  that
we will be able to attract and retain an adequate number of suitable employees.

     We Will Be Subject To Significant Domestic and International Regulation and
May Not Be Able To Obtain Necessary Regulatory  Clearances to Sell Our Products.
We are selling medical devices and intend to sell additional  medical devices in
the future.  The manufacture and sale of medical devices intended for commercial
distribution are subject to extensive  governmental  regulation.  Our failure to
comply with regulatory  requirements  would jeopardize our ability to market our
products.  Noncompliance  with applicable  requirements can result in failure of
the  regulatory  agency to grant  pre-market  clearance or approval for devices,
withdrawal or suspension of approval, total or partial suspension of production,
fines, injunctions,  civil penalties, refunds, recall or seizure of products and
criminal  prosecution.  Medical  devices  are  regulated  in the  United  States
primarily  by the FDA and,  to a lesser  extent,  by  state  agencies.  Sales of
medical  device  products  outside  the  United  States  are  subject to foreign
regulatory  requirements that vary from country to country.  Generally,  medical
devices require pre-market  clearance or pre-market approval prior to commercial
distribution.  A determination that information  available on the medical device
is not  sufficient  to grant the needed  clearance or approval will delay market
introduction of the product. In addition,  material changes or modifications to,
and changes in intended use of,  medical  devices also are subject to FDA review
and clearance or approval. The FDA regulates the research, testing, manufacture,
safety,   effectiveness,   labeling,  storage,  record  keeping,  promotion  and
distribution  of  medical  devices  in the  United  States  and  the  export  of
unapproved  medical devices from the United States to other countries.  The time
required  to obtain  approvals  required by foreign  countries  may be longer or
shorter than that required for FDA clearance, and requirements for licensing may
differ from FDA requirements.  The current regulatory  environment in Europe for
medical devices differs significantly from that in the United States.

     We  Expect  to  Encounter  Rapid   Technological   Change  and  Significant
Competition.  The  medical  device  market  in which we  intend  to  compete  is
characterized by intensive development efforts and rapidly advancing technology.
Our future  success will depend,  in large part,  upon our ability to anticipate
and keep pace with advancing technology and competing innovations. We may not be
successful in  identifying,  developing  and marketing new products or enhancing
our  existing  products.  We  believe  that a number  of large  companies,  with
significantly  greater  financial,  manufacturing,  marketing,  distribution and
technical resources and experience than ours, are focusing on the development of
visualization products for minimally invasive surgery.

     Our Profitability in the Visualization  Technology  Business to be Acquired
From Vista is  Directly  Related  to the Level Of  Reimbursements  for  Surgical
Procedures  Using the  Offered  Products.  We  market  the  products  previously
marketed by Vista in its  Medical  Technology  Business.  Our  profitability  is
directly related to the level of payments for the surgical procedures,  in which
our  products  will  be  involved,  either  by  Medicare  or  private  insurance
companies.  We could be  adversely  affected  by changes in payment  policies of
government or private  health care payors,  particularly  to the extent any such

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changes  affect  payment for the procedure in which our products are intended to
be used.  It is a continuing  trend in U.S.  health care for such payments to be
under continual scrutiny and downward pressure. We believe that reimbursement in
the future will be subject to increased restrictions,  both in the United States
and in foreign markets and that the overall  escalating cost of medical products
and services has led to and will continue to lead to increased  pressures on the
health care industry,  both foreign and domestic, to reduce the cost of products
and services, including products which we offer.

We expect that our products  typically  will be used by  hospitals  and surgical
centers,  which bill various third-party  payors, such as governmental  programs
and private  insurance  plans,  for the health care  services  provided to their
patients.  Third-party  payors carefully  review and increasingly  challenge the
prices charged for medical products and services or negotiate a flat rate fee in
advance.  Payment  rates  from  private  companies  also vary  depending  on the
procedure  performed,  the  third-party  payor,  the  insurance  plan and  other
factors.  Medicare compensates hospitals at a predetermined fixed amount for the
costs  associated  with an  in-patient  hospitalization  based on the  patient's
discharge diagnosis and compensates  physicians at a pre-determined fixed amount
based on the procedure performed, regardless of the actual costs incurred by the
hospital or  physician  in  furnishing  the care and  unrelated  to the specific
devices or systems used in that procedure. Medicare and other third-party payors
are  increasingly  scrutinizing  whether to cover new  products and the level of
payment  for new  procedures.  The  flat  fee  reimbursement  trend  is  causing
hospitals to control  costs  strictly in the context of a managed care system in
which health care providers contract to provide  comprehensive health care for a
fixed cost per person. We are unable to predict what changes will be made in the
reimbursement methods utilized by such third-party payors.

If we obtain the necessary foreign regulatory registrations or approvals, market
acceptance of our products in international markets would be dependent, in part,
upon the  acceptance  by the  prevailing  health care  financing  system in each
country.   Health  care  financing   systems  in   international   markets  vary
significantly  by country  and include  both  government  sponsored  health care
programs  and  private  insurance.  We cannot  assure you that  these  financing
systems will endorse the use of our products.

     We May Be Subject To Product  Liability  Claims And Have Limited  Insurance
Coverage.  By engaging in the medical devices business, we will face an inherent
and  significant  business risk of exposure to product  liability  claims in the
event that the use of our products results in personal injury or death. Also, in
the event that any of our products proves to be defective, we may be required to
recall or redesign such products. We have obtained liability insurance coverage,
however,  our  coverage  limits  may not be  adequate  to  protect  us from  any
liabilities we might incur in connection with the  development,  manufacture and
sale of our products.  A successful  product liability claim or series of claims
brought against us in excess of our insurance coverage or a product recall would
negatively impact our business.

                          ITEM 3. CONTROLS AND PROCEDURES
                  EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

(a)   Evaluation of Disclosure Controls and Procedures

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     Based on their  evaluations as of March 31, 2004,  the principal  executive
officer and principal  financial  officer of the Company have concluded that the
Company's  disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e)  under the  Securities  Exchange  Act) are  effective  to ensure  that
information  required to be disclosed by the Company in reports that the Company
files or submits  under the  Securities  Exchange  Act is  recorded,  processed,
summarized and reported within the time periods specified in the rules and forms
of the SEC.

(b)   Changes in Internal Controls

     There were no significant  changes in the Company's  internal controls over
financial  reporting or in other factors that could  significantly  affect these
internal  controls  subsequent  to the date of  their  most  recent  evaluation,
including any  corrective  actions with regard to significant  deficiencies  and
material weaknesses.

                            PART II - OTHER INFORMATION

Item 1. Legal Proceedings.  We are not a party to any legal proceeding.

Item 2. Changes in the Rights of the Company's Security Holders.  None.

Item 3. Defaults by the Company on its Senior Securities.  None

Item 4. Submission of Matters to Vote of Security Holders.  On February 24, 2004
the holders of 4,700,300  shares of our common stock out of the 6,294,650 shares
of common  stock  issued and  outstanding  consented in writing to a proposal to
amend our Articles of  Incorporation  to increase the number of shares of common
stock which we are  authorized to issue from  20,000,000 to  100,000,000  and to
increase  the number of shares of  preferred  stock which we are  authorized  to
issued from  5,000,000  to  25,000,000.  This  consent  was  obtained in lieu of
holding a Meeting  of  Shareholders.  A  Preliminary  Information  Statement  on
Schedule 14(c), and an amendment thereto, has been filed with the Securities and
Exchange Commission in connection with such written consent.

Item 5. Other Information.

Item 6(a). Exhibits. 31.1   Certification   by  the   Chief  Executive   Officer
                     pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

                     31.2  Certification by the Chief Financial Officer pursuant
                     to Section 302 of the Sarbanes-Oxley Act of 2002.

                     32.1  Certification by the Chief Executive Officer pursuant
                     to Section 906 of the Sarbanes-Oxley Act of 2002.

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                     32.2  Certification by the Chief Financial Officer pursuant
                     to Section 906 of the Sarbanes-Oxley Act of 2002.

Item 6(b).  Reports on Form 8-K.  Form 8-K's were filed by the  Company on March
17, 2004, April1, 2004 and April 19, 2004.

                                     SIGNATURE

     In accordance  with the  requirements  of the Exchange Act, the Company has
caused this report to be signed on its behalf by the undersigned  thereunto duly
authorized.

Dated:    May 13, 2004                VIKING SYSTEMS, INC.

                                      By  /s/ Thomas B. Marsh
                                          Chief Executive Officer, President

                                      By  /s/ Joseph Warrino
                                          Chief Financial Officer







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